What Severance Pay Rules Must Employers Follow in North Macedonia?

Which Employees Qualify for Severance Pay?

• Employees whose employment is terminated for business reasons such as redundancy, restructuring, or technological changes.
• Employees dismissed due to permanent loss of working capacity or occupational disability as confirmed by competent medical authorities.
• Employees whose positions are eliminated and who cannot be reassigned to suitable alternative work within your company.
• Employees on indefinite-term contracts who have completed at least two years of continuous service with your company.
• Employees who are terminated with notice by the employer and who are not dismissed for serious misconduct or other culpable reasons.
• Employees covered by collective agreements or individual contracts that provide more generous severance than the statutory minimums.

What Are the Legal Timelines for Paying Severance?

You should pay statutory severance at the same time you settle final wages and unused leave, typically on or before the employee’s last working day or within the regular payroll cycle immediately following termination. The Labour Relations Law requires timely payment of all employment-related entitlements, and delays can be treated as unpaid wages. In practice, many employers in North Macedonia document the exact payment date in the termination decision and pay via bank transfer for traceability. To reduce disputes, keep written proof that the severance calculation, payment date, and bank confirmation were shared with the employee. If a dispute is pending, you should still pay the undisputed minimum amount without delay.

What Penalties Apply if Severance Is Not Paid Correctly?

If your company fails to pay severance correctly in North Macedonia, labour inspectors and courts can impose financial and administrative sanctions. Non-compliance is treated similarly to non-payment of wages, and employees can claim arrears, interest, and damages, as well as reinstatement in some cases.

• Labour inspectors may issue orders to correct violations and pay outstanding severance within a set deadline.
• Administrative fines can be imposed on the company and responsible managers for breaches of the Labour Relations Law.
• Courts can order payment of unpaid severance plus statutory interest and legal costs.
• Serious or repeated violations can trigger enhanced inspections and reputational damage with unions and authorities.
• Non-compliance can also undermine future terminations, increasing the risk of wrongful dismissal findings.

Does Outsourcing Employment via an EOR Change Severance Liability?

Using an Employer of Record (https://www.playroll.com/employer-of-record) in North Macedonia does not remove the underlying obligation to respect local severance rules. Legally, the EOR is the formal employer and is responsible for calculating and paying statutory severance, but your company typically bears the economic cost under the service agreement. If the EOR misapplies the Labour Relations Law, both your company and the provider may face claims or reputational risk. You should ensure the EOR’s contract clearly allocates liability, sets service standards for terminations, and requires compliance with collective agreements where applicable. Regular audits of termination files and severance calculations help confirm that your global policies match North Macedonian law.

Be 100 Percent Compliant in Offering Severance with Playroll

Playroll helps your team navigate North Macedonia’s severance rules by combining local legal insight with practical payroll execution. We track changes to the Labour Relations Law, collective agreements, and case law so your severance decisions are based on current requirements, not outdated templates. Our workflows guide you through documenting the reason for termination, checking eligibility, and applying the correct statutory or contractual formula.

With Playroll, you can standardize termination processes across countries while still respecting North Macedonian specifics like notice periods, protected categories, and minimum severance thresholds. Our Employer of Record and payroll solutions calculate amounts, schedule payments, and generate compliant documentation, reducing the risk of disputes or inspections. Your HR and finance teams stay focused on strategy while we handle the operational and legal details of severance compliance.